862.51 Bondholders/486: Telegram
The Secretary of State to the Ambassador in Germany (Wilson)
105. Your 332, June 28 and Heath’s77 cable for Treasury 333, June 28.78 Department is of course desirous that American holders of German bonds receive consideration due them from the German Government, and termination of discriminations to which they are now subject compared with holders of other nationalities. The Council is of course free to conduct any negotiations it wishes toward these ends.
However, in view of Brinkmann’s statements that any offer be conditioned upon the obtaining of new trade concessions from the United States we believe it advisable that the Embassy make it distinctly clear to both Clark and to Brinkmann and to other German authorities that it is not prepared to link in any way such debt discussions with trade matters. If the Council permits itself to be put in a position where consideration for American debts is put on this conditional basis, confusion and dissatisfaction will result. It is believed that the despatch of any German mission therefore would not serve a useful purpose.
The preceding concerns the debt of German bonds. In regard to Austrian bonds, the Government’s position remains as presented to the German Government in its communications of April 679 and June 9.80 It plans to sustain without modification the view that there is no reason why the American investor should be called upon to suffer injury because of the absorption of Austria into Germany; it furthermore expects that American bondholders receive as favorable consideration as may be granted the holders of Austrian bonds of other nationalities in connection with any special agreements the German Government may now be engaged in negotiating.
For your own background. The Embassy will bear in mind that payments to Germany of all kinds from the United States are now permitted free of restriction and control in contrast to the increasing minute and comprehensive restrictions being enforced by the German Government upon payments to American citizens. This is creating a growing amount of dissatisfaction in the United States.